Millions of Australians are waiting to learn whether JobKeeper will be extended
Financial lifelines will eventually come to an end in Australia leaving many people in a precarious position. Here’s what could happen.
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Financial lifelines for cash-strapped Australians are due to end in the coming months which could be dire for many households and businesses.
However already some extensions are being made to help those who will financially struggle to get through a horror year.
Cash-strapped mortgage customers were given a reprieve when the banking sector revealed they would be extending repayment holidays for those beyond their six-month break, but of course it’s only for those who desperately need it.
The banks issued a strong message to customers that those who can start paying their loans again must, while for those who simply can’t pay could be given the option to have a further four months of breathing space.
This would see many people through until early next year.
But don’t be fooled by repayment holidays – while they are necessary for some to get through this time, interest is still charged during this paused period. It’s added to the loan term, so effectively it’s delaying the inevitable.
What remains to be seen is if there will be a significant impact on the property market once these repayment holidays dry up for good.
But let’s face it, banks can’t provide loans where customers can stay on repayment holidays for years and years. It’s not financially viable.
Lenders need as many customers as they can get to start making repayments again and this short-term lifeline was only ever meant to be temporary.
But now many financially-stressed businesses and their employees relying on government support including JobKeeper are worried about what will happen when this financial lifeline ends in September.
There are now 900,000 eligible organisations covering 3.5 million employees who are receiving JobKeeper payments.
The $70bn scheme is what has been able to keep many businesses afloat but again it’s a short-term fix.
There will be businesses who won’t survive this pandemic and JobKeeper won’t be enough to keep them chugging along.
JobKeeper will be extended in some shape or form beyond September with speculation it could be renamed JobMaker and tougher eligibility requirements will be enforced.
The Federal Government will release a review of the program on July 23 as part of its budget update.
But given what is happening in Victoria right now, with five-million people in the thick of lockdown for at least another six weeks, many businesses are going to need additional support.
Under the scheme for eligible businesses, employees receive $1500 payments for the duration of the program.
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It’s devastating to hear the tales of Victorian businesses such as cafes, restaurants, pubs and gyms who were only starting to get back on track after opening up again to be now forced to shut up shop. For eateries there, it’s back to takeaway only, while that state’s gyms have been forced to close completely.
What also remains to be seen is the true state of the nation’s unemployment rate once JobKeeper – in whatever form – ends.
It’s likely many jobs that were given a lifeline during this pandemic simply won’t be there once the Government’s financial support is cut off for good.
Originally published as Millions of Australians are waiting to learn whether JobKeeper will be extended